Providence shareholders vetoed shift into new market
International diversification by Providence Resources was vetoed by "certain shareholders" last year, according to the firm's chief executive Tony O'Reilly Jnr.
Following the group's extraordinary general meeting (EGM) to approve raising $3.76m (€3.5m) through a share placing yesterday, Mr O'Reilly Jnr said shareholders want the company to focus on its operations in offshore Ireland. However, the board "think it would be good to look at other countries as well".
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"But you have to respond to what your shareholders want," said Mr O'Reilly Jnr. "And our shareholders clearly said no international expansion, for the time being, [to] focus on what you have in Ireland."
"We progressed a number of [international] opportunities and went and talked to shareholders, and certain shareholders said no, and that created a scenario where we couldn't proceed," he said.
Mr O'Reilly Jnr, who founded the oil and gas exploration company in 1997, added that people would likely hear about "one particular deal that we were going to do that we didn't do, which is unfortunate; the board really wanted to do it, thinking it was a good counter- balance".
Following yesterday's EGM, which was momentarily interrupted by an Extinction Rebellion protester, the company said it would "probably not" extend the current deadline to receive a $9m loan advance from Chinese backer APEC.
Funding from APEC had initially been expected late last year, and was then due to be paid over on June 14. In what was the latest in a series of deadlines since then, the funds had until close of business yesterday to be transferred.
Mr O'Reilly Jnr said he remained "confident" that the funds would arrive.
"I was out there last week meeting with them [APEC], but this has gone on a little too long for shareholders and we regret having to do the capital raise, so we will just have to review the situation in the next few days," he said.
Should the funding not materialise, Mr O'Reilly Jnr said that "certainly" there were other companies interested in talking to the group.
Since the start of this year, shares in Providence, which is primarily focused on its Barryroe site off the Cork coast, have fallen 59pc.
Providence reported a loss before tax of €5.5m in the first half of this year. The group had cash and cash equivalents of €1.8m as at June 30.
The funds raised yesterday will be used to cover costs associated with the re-engineering of the firm's business model. In addition, $500,000 will fund the balance of costs related to the acquisition of the site survey at Barryroe.
The remaining $2.5m will be spent on general working capital for the period to the beginning of February 2020.